Should we care, because the free market doesn't?
On the current trend the UK will soon lose the ability to make steel from scratch, it will be reduced to making it from scrap; recycling old steel. As many commentators point out there is no major country in the world that does not maintain the ability make steel from iron ore.
Much of that is down to some kind of macho swaggering about industrial power, a country that can’t make steel is not a real country. But some is based on the fact that steel is a vital component in a vast range of essential areas, including the defence industries.
So the UK would be left unable to build ships or submarines or tanks from scratch. Yet it is hard to imagine a scenario in which other countries wouldn’t sell the UK very good steel. Could we really not buy the steel necessary from Germany or France or the USA?
Since so many countries insist on maintaining a steel industry, often at a loss, why not take advantage of their stupidity and have them produce cheaper steel than we could?
In the end this comes down to the economic philosophy of the government, it does not believe in having an industrial strategy, it claims that is picking winners, and therefore it does not have an opinion as to whether the UK needs a steel industry or not; that is for the markets to decided, except.
The government has thrown hundreds of millions at Tata to stop this happening and done it so badly it has failed, so this is more a cock up than a philosophy and more importantly if you follow this line of thinking there is nothing that the UK needs to protect.
Would the government willingly let the ability of the country to make submarines or naval vessels go, missiles, aerospace, all defence equipment, microchips, all medicines? Would it let all scientific and medical research go abroad or electronics?
Some of those are in danger of going, medicine production for instance and we can no longer make fighter aircraft or pretty much any other kind of aircraft on our own. Much of that is down to cost and the benefits of international cooperation but some is down to the government just deciding that it can rely on others to do the work and just buy the necessary products on the international market.
So the real question is where do you draw the line?
But drawing lines is impossible if this government obviously doesn’t have a clue about what industries are important and need helping and developing and which don’t and doesn’t even think it is its business to do that.
In short, steel will go unless the government has an industrial strategy and decides it has to stay, but that is impossible because it doesn’t have an industrial strategy.
The only temporary way out will be if the government has a one off panic and decides to throw even more money at Tata. but that is still not a strategy. The steel industry will go eventually even if the government did save it this time, if there is no strategy to keep it here.
Free market economics is fine but you still need a plan, because the free market doesn’t care if you can defend yourself or not and governments really ought to.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media
Arguably, there is nothing that a mid-size country can produce without the contributions of other industrial nations. Globalism has not been totally abolished.